DMGT received £52.5m for Northcliffe plus 38.7pc of the shares in the new company, while Yattendon took a 21.3pc stake.

Other shareholders in the new venture including Trinity Mirror with a 20pc stake and former Conservative party deputy chairman Lord Ashcroft.

The OFT has today published a notice on its website inviting comments on the deal.

It states: “The Office of Fair Trading is considering whether this agreement has resulted in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation has resulted, or may be expected to result, in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.”

The investigation will be seen by analysts as a critical test of the OFT’s attitude to local press mergers.

Last year, it announced a probe into Northcliffe Media’s attempts to sell seven of its Kent titles to the KM Group which resulted in the whole deal being called off and two of the newspapers involved closing down.

Commenting on the OFT announcement, Local World chief executive Steve Auckland said: “Local World’s vision is to create a flourishing and competitive business which adds great value to the communities it serves.

“We are confident of providing full reassurance on any issues the regulator may raise.”

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